Calculates how many periods it will take regular equal payments at a fixed periodic interest rate to reach a future value.
Syntax:
TERM( payment:Number, interest:Number, future_value:Number )
where:
payment | is the regular payment made each period; |
interest | is the interest rate received; |
future_value | is the future value you want to achieve. |
Formula:
TERM = LN( 1 + (future_value × interest ∕ payment) ) ∕ LN( 1 + interest )
Example:
If you invest £500 a year into a pension fund, with an interest rate of 10% per year, how long will it take to accumulate £100,000?
The formula
TERM(500, 0.10, 100000)
returns the number 31.94
(years).